Rice University is celebrating its centennial this week, and president David Leebron spoke to Chronicle reporter Monica Rhor about issues in higher education, the growth of online learning, and some of the school's achievements.

Q: What is the greatest challenge facing higher education?

A: At the top of the list would have to be finances. Every financial resource we draw on is under some pressure. We know we can't keep raising tuition at the rates we'd have to start to raise tuition. We know that the expected returns on endowments are going to be less than they've been in the decade prior to three years ago. We know as our student bodies become more diverse the demands on financial aid are going to be greater. We know that government research funding is probably going to be kind of flat. The question is: how best can universities continue to perform the role that they have traditionally performed, especially in the United States, in being one of the engines of our competitiveness in an innovative society? How can we continue to fuel that in the years and decades ahead?

Q: What are the greatest challenges facing Rice?

A: Number 1 is continuing to compete with the best research universities in the world while still providing the kind of education that Rice is known for. If you look at U.S. News on one hand, which essentially says that we are among the top research universities of the United States and on the other hand, Princeton Review or this new ranking the Alumni Factor, which says that we provide an experience that is competitive with a small liberal arts college, that's what we want to continue to try to do.

Q: At a March town hall meeting, you said endowment returns had dropped from 9.5 percent to 7.5 percent. What is the financial future for Rice?

A: I actually think the big issue is how do we keep doing new things? How do we support an incredibly entrepreneurial professoriate? How do we compete in an overheated market for the most talented professors? Those are the questions that tight resources require us and other universities to struggle with. We intend to remain not just the best education and the happiest students but also we are usually on the best values in the United States and that's where we intend to be. We feel it's a very strong part of our history, unlike a lot of universities, to make our education affordable and accessible to people who are from backgrounds where they otherwise couldn't afford it.

Q: You once said one way to measure Rice's achievements was to look at the difference the university had made in the world. What are the differences Rice has made?

A: One is, of course, in the lives of our students and the opportunities our students have. It's hard to aggregate that and that's why the alumni ranking is important.

Number 2 is the research and whether it's the influence Rice has in digital signal processing and high performance computing or the discovery of the buckyball and all the things that nanotechnology can provide, which is everything from energy to health. We're making a tremendous difference and we're making it both in the United States and abroad.

The third piece is what we do in terms of service and particularly for the city of Houston. I'm really proud of what we've been doing for Houston and that's an area where we've grown a lot and the Kinder Institute is going to make a huge difference. This new arts survey, which is going to start changing how people think of the arts. The engagement of Rice in K-12. We're now teaching all these science and math teachers from HISD. We bring kids from across the city onto the campus.

Q: Rice recently joined with Coursera and entered the world of massive open online courses. Why was that step important?

A: 2012 was really the year that world changed, and what really changed is the engagement of the elite institutions in online education. That's for a lot of reasons ranging from financial to reputational to just wanting to serve a broader segment of a wider community and I think Coursera offered us an opportunity to get some initial involvement, to provide an outlet for our faculty who are interested in learning how to do these courses.

Q: What challenges do you see in moving into online courses?

A: One of the challenges is that both the technology and the economic structure in the field are going to be changing pretty rapidly so trying to make right decisions at each point in time so that you don't commit to the wrong thing. I always keep in mind the story of the Sony Betamax and VHS. Of course now no one knows what a videotape is anymore. Sony was out first with a good product and protected it ... and it lost. Universities have put in tens of millions of dollars into this that have amounted to nothing. We want to be little cautious but at the same time we want to be at least a little bit bold.